The Decarbonization of the Shipping Industry and the New Fuel Issue ()
1. Introduction
In the past, shipping, and other industries, considered that the sea is available free and capable of absorbing any kind and quantity of pollution1. Technical progress2 resulted in tankers becoming larger and larger, in order to secure economies of scale.
Unfortunately, shipping caused a number of major tanker accidents: Torrey Canyon3 (1967), Amoco Cadiz4 (1978), Exxon Valdez5 (1989), Braer6 (1993), Sea Empress7 (1996), Erika8 (1999), and Prestige9 (2002). Could these have been avoided? Hindsight is excellent, but one must examine the causes of accidents if history’s mistakes are not to be repeated. The study of marine accidents, over many years, taught us that an accident is the culmination of an entire chain of errors10.
The relevant legislation on air pollution adopted by IMO11 in 1997, and came into force 8 years later. This focused on the effects of ships’ emissions on environment. It set limits (Appendix 1) on emissions of Sulphur and nitrogen oxides and CO2, released from ships’ exhausts, and which have depleted the ozone layer12. Later, emissions of particulate matter13 were added.
Many people characterized the decarbonization of shipping as the most serious challenge ever faced by the industry. On 15th July, 2011, the IMO adopted the mandatory EEDI14 (Energy Efficiency Design Index) for new ships (MARPOL Annex VI), and the SEEMP (Ship Energy Efficiency Management Plan) for all ships.
In 2018, IMO adopted15 the “Greenhouse Gases Emissions Strategy” to reduce GHG emissions by half relative to their 2008 levels. The goals were ambitious, requiring new ships to cut their carbon intensity by 40% by 2030 (relative to 2008). In 2021, IMO set a new target of cutting 1.5% off CO2 each year between 2023 and 2026. Shipping is responsible for an additional five causes of pollution, in addition to oil spills, normal emissions and GHGs (Figure 1).
Regulations in MARPOL 1973/1978 Annexes prevent most of the above. Biofouling16 including the impact of barnacles are pollutants due to ships being long idle, estimated to be responsible for at least 110 million tons extra carbon emissions p.a. This first became a problem during the 2009-2021 crises.
Some major companies, at the end of 2021, called for ships that will emit zero GHGs by 2050, so long as this is clearly signaled as a dominant situation for ships by 2030.
Moreover, the EU Commission announced its Green Agreement and package Fit for 55-meaning17 to reduce carbon emissions by 55% by 2030 (from 1990 levels). This shortened the decarbonization time by 20 years, which is very ambitious. In addition, the EU proposed the extension of its Emissions Trading System18 (ETS) to include shipping. This is a new climate plan, where EU ETS19 will cover about 90 m. tons of CO2, which is expected to be emitted by ships.
In 2021, an energy crisis was caused by the increase in the price of natural gas, when the price quintupled. The energy sector is fundamental to all economies. The energy sector emits 75% of the MtCO2e in the EU-27. This implies a dependence on the natural gas of nations that had different political systems from EU. An easy solution for EU-27 is to depend on its own energy sources, including its schist industry.
A cleaner planet, and a cleaner shipping industry, will be the target of the world leaders who meet in Glasgow in November 2021, to discuss world climate.
The world climate is positioned as an enemy, not a friend as it used to be, following the meetings in Kyoto (2005) and Paris (2015). 150 maritime leaders (the Global Maritime Forum—GMF20), at the end of 2021, demanded that governments set a target of zero GHGs emissions by 2050, providing incentives under the slogan: “Call to action for shipping decarbonization”. This also played into the COP2621.
Finally, one question has to be answered: Are the cities into which we bring children to live totally acceptable? (Figure 2)
In October 2021, The International Chamber of Shipping22 submitted a plan to IMO23, for additional measures to be taken by governments to achieve zero emissions24 by 2050. It is recognized that ships emit particulate matter, NOx, SOx and CO2, which are considered co-responsible for the present revenge of the climate. Certain people argue that maritime industry has to show signs of effective decarbonization earlier, meaning by 2030.
The importance of this research is due to a number of fundamental reasons: 1) the decarbonization of shipping/maritime industry will improve the global climate. 2) The ships—about 27,000—will have to install new engines burning the new-still unknown—green fuel. 3) This research reflects—in an objective way—the views of the shipowners. 4) It lists the advantages and disadvantages of each fuel, but most important of all is that in economies “increasing returns” apply and thus one fuel will prevail… This has the corollary that the various efforts—where only 25 mentioned here—had (have) to be coordinated as at the end one fuel will be used, and hundreds of millions of $ spent already will have no real response… The limitation is that our theory cannot indicate which fuel
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Figure 2. The cities parents deliver to their children. Source: modified from that release by Reuters (2021).
of the 5 on the agenda will be. The further contribution of this research is really that a number of complex issues are discussed for the first time like decarbonization, the new fuels, maritime and general environmental issues.
2. Aim and Structure of the Paper
The paper analyzed the global, and maritime, efforts, to discover one or more green fuels, which will replace, wholly or in part, HFO. It is believed that this target can be achieved if accompanied by certain limits on ships’ GHGs emissions, as set by the IMO since 2005.
The paper is structured in nine parts, after literature review. Part I presents the 25 current projects to decarbonize the planet and shipping. Part II deals with the new ideal role for classification societies and shipyards. Part III deals with the dilemma: climate as a friend or economic growth as an enemy. Part IV deals with the efforts of maritime community to “discipline” ships to avoid oil pollution at sea, on the principle of reactivity. Part V deals with various issues relating to oil pollution at sea. Part VI deals with the history of using fuel oil by ships (the HFO case study below). Part VII deals with the history of marine fuels. Part VIII deals with the fuels that are candidates for future: their advantages and disadvantages. Part IX deals with the impact of the current energy crisis. Finally, the paper concludes.
3. Literature Review
Lorange (2009: pp. 178-181) argued that, twelve years ago, the large shipping companies were prepared to reduce fuel consumption and diminish air pollution, by adopting one or more mitigating actions, as shown in Figure 3.
Steady steaming provided fuel savings and fins added to rudders improved hull design. The propeller system, and the anti-fouling of hulls, also improved ship’s performance, using friction-reduced paints. Electronic fuel injection in diesel engines created fuel-savings. The CO2 emissions per unit load of ships were very low—from 1 to 11 units—compared to a maximum of 398 for airplanes, and 6 for railways (due to Lorange, 2009: p. 180). Moreover, NOx emissions were reduced by using a catalytic converter, which transforms urea using air and water. Seawater was also used to clean Sulphur from bunker fuel (the
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Figure 3. Areas where large shipping companies reduced fuel consumption and/or air pollution, 2009. Source: inspired by Lorange (2009).
snubbing technology).
A scrubber is also recommended in recent years to prevent air pollution, but it is quite expensive, with a current price of nearly $1 m. The ship’s trim can be improved to reduce fuel consumption if the vessel has optimum speed. Moreover, the bow and stern are designed to be at a specific depth in the water. To achieve this, the dynamic trimming assistant—DTA—can be used. Optimal routing can be obtained from special providers, minimizing the distances covered by the vessel.
As shown, large shipping companies tried to economize on fuel consumption in many ways. Large Greek companies adopted policies to reduce fuel cost during the deep and prolonged shipping crisis (1981-1987). This had to be a continuous effort to reduce fuel consumption, whether or not it contributes to decarbonization. Between them, the 8 methods listed above (Figure 3) are expected to reduce fuel consumption by 40%!
This paper innovated because it placed the economies of the increased returns into the decarbonization effort of the maritime industry, along with energy crisis. It avoided the few lengthy technical analyses existed, incomprehensible for many of the maritime literature readers. The non-technical, and economic, research is rare as far as the new fuel is concerned. In addition, surfing in internet, we listed 25 important projects with several million $ in investing, from powerful global players in fuel production and supply, engine manufacturing, users and ports, etc.
This paper is proud for its suggestions to: ship classification societies, global shipyards, machines manufacturing, etc., all to adopt AI. Towards societies with a new “speed limits” policy, an insight into growth & development models so that the climate to contribute to growth! A dilemma for further research… where environmentalists accuse economists and economists accuse environmentalists! Nature revenge economists. A great amount of information found in internet communications from shipping information centers is mentioned.
4. Part I: 25 Projects to Decarbonize the Planet and the Shipping Industry
The current level of mobilization, in the form of joint ventures among various companies, to decarbonize the planet and shipping is impressive (Table 1). The system might work more effectively, however, if the UN and IMO, each, established, an international body to coordinate and monitor these various projects. In the absence of such coordination, the proposed fuel and engine technologies will be competing. A better approach would be to combine international forces, at least among allies. But before focusing on shipping, an attack on emissions is needed reducing CO2 emissions from air-travel, agriculture25 and certain uses of land.
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Table 1. Shipping decarbonization (= zero emissions) 25 projects (end 2021).
One can imagine an ideal situation where the R&D departments of large shipbuilding companies (Bruce & Garrard, 1999), and the classification societies, and large shipping companies come together to use artificial intelligence41—AI—to make smart on-board machines. Such machines would not need pre-training, and they can be self-taught (Metz, 2021), capable of mimicking the human brain. A smart main engine could ask for a spare part, or for regular maintenance. Or an engine, recognizing that it is overloaded, could bring an auxiliary engine on-line.
One can imagine an intelligent radar to indicate the most economic route, and also to show the weather conditions seven days ahead; this is now possible. The captain has the best information about the condition of the ship, and if knowledge of wind speeds and waves can be shown on smart radar, the captain would be in a position to choose to seek a port of refuge, rather than risking the ship, the cargo and the crew (Goulielmos & Gatzoli, 2012).
The future ideal shipping industry will benefit from machine learning, deep learning, and neural networks42. The first neural network, built in 1958, the Perceptron, is very useful for shipping, even today, as it can recognize printed letters, handwritten words, oral instructions, human faces, and translate languages. A network can be expanded into the fascinating area of connectionism. China has announced that it will create an ideal shipbuilding industry by 2030, using AI to ensure that all machines and engines on board are smart.
6. Part III: The Climate as Friend and Economic Growth as Enemy
Science faces a big dilemma: Is the climate a friend or is economic growth the enemy? (Taliapetra et al., 2021). Theories of growth embody certain contradictions. Neo-classicals believe that the economy is inherently stable and tends to full employment. Keynesians argue that the economy is unstable and the errors of the Classicals and Neo-classicals must be corrected. The Keynesian and Neo-Keynesian school is best represented by the Harrod-Domar growth model for a single sector. This model posits a constant capital output ratio, V, which is to be achieved, and a constant long-term real rate of interest, R, with savings, as a constant percentage of real income; S. Labor increases by n, accompanied by technical progress43, t.
In this model, savings, are the key element, and equal the required investment to achieve growth. S/V must change at n + t. The expected growth rate is defined as dY/dt, and the economy will balance if S/V = dY/dt. This means savings must be equal to the resources required by investment to achieve the expected growth rate. While Keynesian consumption is based on a powerful human law, investment is too. Keynes hides this investment in “animal spirits” (Keynes, 1936: p. 161). Human spirits—a better term—represent the “spontaneous human optimism”, the “inclination for one businessman to do something positive”, and the “spontaneous human urge to act”. Human psychology was the foundation of Keynes’ theoretical construction (Goulielmos, 2018).
The more economic laws one establishes, the more similar economics becomes to mathematics and physics! Economists have always envied physics and mathematics for their positiveness. Keynes understood the great importance of investment, over the passive role of consumption, and devoted roughly half the pages in his 1936 book to investment. Keynes clearly saw that investment is not an automatic process, based on the availability of funds to finance investment projects. The human spirits are a necessary, but not a sufficient, condition for enterprisers—as Keynes called business-men. Two further conditions were needed: 1) A sufficient degree of confidence about the marginal efficiency of the investment in an uncertain future; 2) The level of the deflated rate of interest, which has to be paid, must be less than the rate of return on the investment in the project over its whole life, which may be as long as 20 years.
During an economic crisis, although interest rates are low, confidence is absent. If a crisis is global, neither tourism nor exports can help. Governments have to be enterprisers, or at least good economists, and they must realize investment, as allowed by savings, which enterprises cannot, despite their spirits. Taliapetra et al. (2021), argued that to defeat the climatic enemy, the planet has to be decarbonized, where 80% of global energy comes from fossil fuels, to maintain the global rise in temperature below 1.5 degrees C from the level of the global pre-industrial period.
Though certain targets sound long-term, they are not; they are urgent if we are to prevent fires, floods and the very hot summers. Volcanoes, like that in La Palma, Spain, cannot be controlled. The cost of decarbonizing the planet and shipping is an important consideration, but there is no clear answer. The International Energy Agency (IEA) argues that governments should spend 4.5% of their GDP, which would mean an 80% increase. The global GDP in 2020 was roughly $84 tr., so global investment of about $3.8 tr. will be required. Greece, for example, will have to spend nearly $11 b. This means that it would be cheaper for the Greek government to forget about climate. A Greek bank consultant argued (Sunday Press, 10/10/2021) that Greece needs ?0 b. in investments, or more than 20% of its 2017 GDP, to achieve decarbonization.
All hopes to save the planet and shipping, after governments fail to take the necessary action, rest on technology, such as hydrogen produced from renewable sources of energy, or the increased storage capacity of batteries. There are also technologies that catch or absorb CO2 at source. These are very costly, technologies at the moment.
7. Part IV: The Efforts of the Maritime Community to Discipline Ships to Avoid Oil Pollution at Sea on the Principle of Reactivity
Sea pollution preoccupied an international conference for the first time in 1952 in London. This resulted in the 1954 convention for the prevention of pollution of the sea by oil (OIL POL 1954) (Farthing & Brownrigg, 1997). The focus of the conference was that tankers used to discharge their ballast water, containing residual oil, into sea, just outside loading ports. The convention made provision for “reception facilities”, but these were for dry cargo ships, and not for tankers. However, the convention merely moved the problem, because it allowed ships to discharge oily ballast water 50 miles from nearest land, even though the sea is connected into one and does not have separate zones.
The shipping community has introduced a number of important conventions, like MARPOL in 1973 and SOLAS in 1974, in almost all cases after a serious marine accident. Public opinion and mass media played a role by exerting pressure on politicians, and those politicians who were ignorant of sipping passed legislation. Imagination is not the strong card of the shipping industry. In the past, captains had exclusive responsibility for a marine accident, until the ISM Code was adopted in 199444. Captains are still responsible today if the company’s management onshore has met all conditions for safe management.
It took 21 years, from 1952, for the shipping community to adopt the 1973 MARPOL convention, which had wider coverage. Between 1952 and 1973 community failed to adopt a holistic approach that combined the regulations for sea pollution with those for land-generated waste. The 1973 MARPOL Convention established, in 1978, important modifications, the two most important of which were segregated ballast tanks (SBT)45 and crude oil washing (COW)46.
A number of factors have inhibited more rapid legislation. Economies of scale47 led to the introduction of VLCC48s and ULCC49s, with a corresponding greater potential for pollution. The introduction of double-hull tankers appeared to be considerably delayed, until 1993. The USA acted unilaterally to legislate the Oil Pollution Act50 in 1990. Shipowners allowed politicians to limit their actions in regard of sea pollution, rather than acting themselves. Shipowners suffered two serious marine accidents, M/T Erika in 1999 and M/T Prestige in 2002, in EU sea areas, which turned the EU against them. (6) Port states did not provide ports of refuge for damaged/distressed ships. And shipowners allowed the establishment of the very useful Port State Police/control51.
The IMO was responsive rather than proactive, and governments were the same. They concentrated on regulations covering how ships are built, by co-approving the regulations of the classification societies. They would have done better to check the shipyards for how they built ships52, and boost technical progress, with the aim of eliminating marine accidents. Overall, the shipping industry is reactive53, and the IMO is reactive54.
8. Part V: Further Issues on Oil Pollution at Sea
1) Patterns in oil pollution at sea
Governments and IMO would be better advised to read certain publications (Goulielmos et al., 2002) supporting the idea that accidents, whether on highways or at sea, are not random. If accidents are not random, governments were either co-responsible or blind. The first task is to look at fatal accident statistics. If one asks why certain specific stretches of specific highways have accident rates that are 10 times the average, the government will most probably answer that this is random. Citizens, however, characterize these points as accident black spots. If marine accidents are random, then ships are forgiven. But if accidents are not just bad luck, further analysis is needed, and there has to be an explanation of why most marine accidents occur in the China Sea and/or the English Channel.
2) The human factor in marine accidents
There is an argument that the great majority (60% - 80%) of marine accidents are due to human error. But a human error is defined as an action or omission that results in a marine accident.
3) The tacit acceptance procedure
Although IMO’s Conventions are often adopted in the immediate aftermath of a serious marine accident, they come into force many years later. This is a mistake, which the IMO partly corrected in 1973-1974, by deciding if a convention had to be put into force at once. This is the tacit acceptance procedure55, and it would have been better if all conventions came into force immediately on adoption, and in any event soon after the accident that has led to them.
4) The cost of vessels’ legal obsolescence
Many conventions, if not all, require a ship to comply with new requirements at an additional cost or to be scrapped56. Our proposal is that such legal obsolescence should be considered a cost that IMO’s nations should pay. To minimize this cost, a prior responsibility has to be placed by Governments on their classification societies, with a view to pressing them to build ships that avoid pollution. Governments should also share obsolescence costs. The wisdom obtained from over 75 years of marine accidents is that we need better classification societies that can foresee trouble, and know what to do before the event.
Legal obsolescence is unfair, because it is effectively retrospective, and penalizes shipowners for errors that were not illegal when their ships were built. This makes the ship-owning profession quite uncertain. If a ship is built according to a good classification society (in IACS), and in a conscientious shipyard, she should be allowed to work until her scrapping.
If governments in the IMO wish ships to be “withdrawn” from the market, before their “natural death”, so that to protect the environment, they should pay. Shipyards should also contribute and pay part of ships’ market value (less ships’ scrap value). Ships that are constructed legally obsolete will be rather cheap. Shipowners will be happy and fairly treated, and the “green” international community will be also happy. Governments, classification societies and shipyards will not, but this obligation to pay will make them more… careful.
5) The end of oil spills at sea?
Dealing with GHGs one may get the impression that the planet and shipping have finished with oil spills, but an oil spill occurred recently in Southern California that resulted in 126,000 gallons of oil being spilled into the Pacific Ocean, from the shore.
9. Part VI: The History of Fuel Oil Used by Ships (The of HFO Case-Study)
Shipping economists (Stopford, 2009: p. 233) argued that fuel oil is the single most important item among voyage costs, accounting for 47% in 2009, and 50% in 2021, of the total voyage costs. The shipping industry is cost dependent, and not price-determining, like other industries (monopolies, monopolistic competitions, oligopolies). Shipping companies cannot fix their prices at the level they wish. Demand and supply set prices.
Between 1974 and 1985, fuel prices increased by 950% (Figure 4).
As shown, the fuel cost increased many times between 1974 and 1979, known as the years of the energy crises, due to specific historical events which took
place in Middle East. Between 1974 and 1985, when fuel costs accounted for 34% of total ship costs, resulted in investments57 in designing more fuel-efficient ships and operating in ways to reduce bunker consumption. This sounds familiar today, as the problem has re-appeared, and shipowners are reacting.
The intensive effort to reduce ships’ fuel consumption was not made in the light of the long view, as it should have been, but on the basis of the contemporary oil price. The efforts continued until 1986, when oil prices fell. But the problem returned between 2000 and 2008, and again in August, 2021. The industry was reactive again. In all fuel oil crises, shipowners focus simply on reducing fuel consumption. Now, they try also to motivate governments to solve this new fuel problem. Fortunately, engine manufacturers, among others, have taken the initiatives. Powerful shipowners naturally believe that decarbonization requires a zero-carbon fuel, and also a new engine. The shipping industry, however, is not prepared to carry any costs, judging from Greek shipowners. Shipowners, at the moment, order ships on two principles: dual-fuel ready58 and NOx Tier III59, and pay a higher price.
Figure 5 shows the factors that determine a ship’s fuel consumption.
As shown, the reduction in fuel consumption can be achieved in at least 10 ways. A ship’s hull60 (area/surface) in touch with the sea has to be reduced,
reducing friction (depending on ship’s design61). The propeller is a science of its own. The cooling of the main engine has to be achieved using less energy. Exhaust emissions are used to heat the ship’s water. The size (volume) of the ship engine must be reduced to free space for cargo—something that is rarely mentioned in theory. Engines should be small, operate at low revolutions and run-on cheap fuel.
Newer ships can be more economical, if they can be bought at a low price, and newer machinery, which normally is more efficient. All investment must obey one economic rule: the additional cost must be lower than the additional income from action. This means that market conditions are a key-element, and are often overlooked by the theory.
As Figure 5 shows, 57% of energy (30% + 27%) is used for two purposes, neither of which is moving the vessel! For example, a Panamax bulk carrier of 1990-2000 vintage, with a speed of 14 knots, consumes 30-tons/day in fuel oil, meaning fuel efficiency in moving her forward. Only 23% of the total energy is used to move the ship forward. This means a partial failure62 of ships’ engine manufacturers. Economies in fuel consumption, achieved after 1980, accounted for 10 tons per day, or 25%, other things being equal; but efforts should have been continued for more fuel-saving main engines.
Apart from the technical and mechanical factors in fuel consumption, the care with which the ship is operated also has a role. The fuel consumed when the ship is off-hire has to be under strict control, and slow steaming is always an option for Captains. High speed is less important for tankers and bulk carriers, than for containerships63. There are shipping companies who have already adopted all possible ways in reducing electricity consumption on board using LED technology.
Under the pressure of high fuel oil prices, between 1979 and 1983, ship’s engine designers, were challenged to design a more efficient new main engine, focused on its “thermal efficiency”. The design of a new main engine emerged as a requirement. The single most important influence on fuel consumption is main engine. A slow steaming policy would have great benefits in terms of reducing carbonization.
In 5 years, between 1979 and 1983, slow-speed, (less than 100 rpm), marine diesel engines provided higher efficiency in energy conversion: 127 grams per brake horsepower per hour, meaning a 15.3% improvement. For example, a diesel-powered 300,000 dwt VLCC, (2005 vintage), consumed 68 t/day, at 15 knots, after 1980, meaning a minimum 50% improvement.
Shipowners, and their engineers, know the relationship between speed, Sa, and fuel consumption, Fa, for a diesel engine, following e.g., the formula64:
,
where Fd is the designed fuel consumption, α is a power coefficient, which is 3 for diesel engines, and Sd is the design speed. For a steam engine, where α = 2, and Sa = 14 knots, Sd = 16 knots, Fd = 44 tons, it actually consumes Fa = 34 (rounded) tons per day. The actual fuel consumption is, however, 10 tons/day lower than the design consumption.
As a result, by reducing maximum speed by 2 knots per hour (nearly 4 km./hour), in this example, a ship consumes near 10 tons less fuel per day. And this raises the question of whether an additional 2 knots of speed is worth its additional fuel consumption, and the impact on the environment. At 10 tons per day per ship, for about 28,000 ships, this amounts to 98 m. tons/year65 (or 2.41% of the world’s consumption).
10. Part VII: The History of Fuels Used for Ship Propulsion
1) Wind as a fuel
The history of ship propulsion is indeed fascinating, as it is related to great advances in technical progress. In the beginning, the power of wind, and the use of sails, provided free energy. Ships then were labour-intensive. This lasted until 1900. The speed of a sailing vessel depended on wind. Often, transit times were important, and thus wind had better to be replaced.
But in 2021, 28,000 existing ships could be equipped with auxiliary wind propulsion technology. The wind (wind turbines), the sun66, and the sea waves are now used for producing electricity along with water through hydroelectric dams.
2) Coal as a fuel
Certain countries found that they had large deposits of coal, and in the early 19th century -or even today-they produced the coal-powered marine steam engine. At that time, nobody thought of CO2 emissions. Some nations have deposits of lignite, and they use it to produce cheaper electricity (Greece).
3) Gasoline: the only fuel for cars (1890-1900)
Although gasoline came to dominate as the fuel for automobiles, between 1890 and 1900 there was a three-way competition between: a) the steam engine, b) the electric motor and c) the gasoline engine (Brian Arthur, 1994: p. 15). Again, nobody thought of CO2.
Ironically, electric motors reappeared around 2021, to claim their position as the only motive force using clean fuel. Of course, one must also consider how electricity is produced and how it can be made widely available in every prior petrol station.
4) Oil as a marine fuel
Oil dethroned all other fuels, at least partially, and especially reduced the role of coal in producing steam, even though oil was a fossil fuel. Diesel engines also dethroned steam engines. Oil suddenly became very expensive after 1973, and since 1979, and from 2000, and at the end of 2021. Shipowners sought the help of technical progress (Goulielmos et al., 2021). Diesel engines use now as mentioned cheap oil (HFO)—a residual product distilled/cracked from the petroleum process. Fuels today appear also under such acronyms as VLSFO67, MDO68 and MGO69.
Ships, finally, were equipped with slow speed, 2-stroke, marine diesel engines, burning HFO. Shipowners were happy with the cheap fuel, and the more efficient engine. But all good things come to an end, although shipowners wish to maintain the status quo, using HFO, or something very like it.
5) The world is “waking-up” now to face the climate as an enemy
Almost all nations now, including the EU and USA, by 2021 have woken-up and realized that climate became a real enemy70, decided to act intensively. All now want urgent action and dream of a decarbonized future. The Glasgow summit, however, resulted to a compromise, and this paper has revealed that the high cost to restore climate as it was, will prevent governments to do it! It is better to accuse governments for inaction, than to accuse them for economic collapse. Globe has to find smarter and cheaper ways (household independent units producing nuclear power, friendly to humans and the environment) to restore climate among a sufficient growth rate, of say 7% p.a.
Ships are allowed to use fuel containing up to 0.5% m/m (mass per mass) sulphur, if they have a scrubber to clean the exhaust gases. A global IMO sulphur limit is in force. Many people believe that this marks the end71 of the situation, when all ships burn the same type of fuel.
6) A mismatch between society’s targets and those of the shipping industry
Figure 6 shows the targets of society.
New, proper fuel is required, which can be environmentally sustainable, by 2050.
Figure 7 shows the targets of the shipping industry, and they are somewhat different.
The shipping industry seeks a new fuel, which emits zero carbon dioxide, CO2, and is safe on board. The CO2 emissions from ships worldwide stand at the limits specified in 2012-2018, between 2% and 3%72. But could a new fuel be available worldwide, in all Ports? Can it be as efficient as HFO? Can it compete with HFO on price? Many dispute this last question.
Shipowners fear a costly new fuel on economic grounds, given the range of new fuels that are being considered. The fuel market is expected to be made up of many small suppliers, and the existing economies of scale may be lost.
Goulielmos (2005, 2018) describes self-reinforcing mechanisms in economics. According to this theory, one fuel will prevail, as a result of a small, historical event73. To understand increasing returns, in the case of competing technologies,
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Figure 6. Society’s targets in relation to shipping. Source: Author.
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Figure 7. The shipping industry’s targets. Source: author.
as here, one has to know that this is a process that is path-dependent, non-ergodic, with many possible outcomes, heterogeneities, small indivisibilities, and chance meetings. These are magnified by positive feedback to tip the system into the actual outcome. History becomes all-important (Brian Arthur, 1994: Chap. 2, p. 27).
11. Part VIII: The Candidate Fuels for the Future: Advantages and Disadvantages
1) LNG
Some expect LNG to establish itself as the new74 fuel… The expectation is based on the fact that LNG will have an 11% share of the bunker fuel market by 2030. Four nations would benefit as main producers: USA, Qatar, Australia and Malaysia. In 2018, demand resulted in higher production of LNG in USA. But LNG producers did not understand increasing returns, and as a result, between 1980 and 2000, the LNG bunkering infrastructure did not expand.
The LNG-fueled engines, which exist already in LNG carriers, seem to be efficient and produce lower GHGs emissions (according to Lindstad & Rialland, 2020). In order for ships to burn LNG, they need an appropriate main engine. Original steam turbine engines must be adapted to be tri-fuel diesel engines (TFDE) and/or a slow-speed diesel engine (MEGI or X-DE).
Whatever fuel is used, high-pressure engines are required anyway. Supporters of LNG propose the “dual-fuel liquefied natural gas (DF-LNG)” engine for LNG carriers, which at the moment is installed in about 500 ships. The advantage of LNG is that it emits 20% to 25% less CO2, and is Sulphur free, although it is a fossil fuel, and its liquefaction needs a very low temperature (−173˚C). LNG is composed mainly of methane (CH4). An important obstacle is the limited number of major ports complying with ISO standard 20519/2017 to supply it. LNG suppliers would also have to invest in ports to create supply centers.
Moreover, there is a need to comply with IMO’s IGF code for LNG ships, and the compression of natural gas (CNG) for the design and construction of LNG-fueled ships. The lack of trained ratings, and especially officers, is another obstacle.
2) Ammonia (NH3)
A classification society predicted that 30 years from now 25% of all ships will be powered by ammonia75, with zero CO2 emissions if produced by renewable energy sources. Ammonia is bound together with hydrogen bonds in its molecules, which can be converted into electricity in on-site in fuel cells. One strong point in favor of ammonia is the world’s first green ammonia terminal76, which cost nearly ? trillion77. Unfortunately, the remaining 75% of ships are expected to burn still diesel, LPG, HFO and biofuels.
12. Part IX: The Impact of the Current Energy Crisis
It is still difficult to estimate the impact of the current energy crisis, and many believe it to be temporary, possibly coming to an end by spring 2022. Others believe that this is the start of a new cold war. We believe that this will be long as Germany investigates the status of the managing company of the Nord Steam 2. But dependence on Russian natural gas varies from a low 3%, for France, to 100% for… Lithuania, Estonia, Finland, and Latvia. Germany depends on Russia for 37% for its gas, and Greece 46%.
Natural gas is priced, in October 2021, at ?00/MW/h, due to Russian (Gazprom) policy—a competitor of OPEC. The quantity of gas destined for Europe reduced in order to serve the forthcoming Nord stream 2 pipe line, with 55 billion cubic meters78.
The future role of the US shale oil industry in covering part of the gas demand is unknown. Certain other circumstances played a role in the present energy crisis, including the reduction of energy from hydroelectric sources (in Norway, Latin America and elsewhere) due to dry periods, and lack of winds. Nuclear power stations have been closed in the EU. There has been also a post-pandemic consumption rally. And there have been stoppages in Chinese manufacturing as well.
The future price of LNG is also unpredictable given the present international antagonism. It is currently near $35 per million British thermal units.
13. Conclusion
Shipping industry has to decarbonize its ships79 by 2050. This will need increasingly urgent actions as time goes by, and particularly by 2030, or even earlier. EU-27, in accordance with the forthcoming package, Fit for 55, adopted an initiative, which it is likely to stand by it.
The industry “will”—sooner or later—“design” an efficient main engine, where fuel will follow the engine. The theory of increasing returns requires that once a fuel gains a market advantage, its demand will grow, its average fixed cost will fall, and profits will follow. This is exactly what happened with the car manufacturing in Japan.
Our dream about the world classification societies and the international shipyards is to provide to the shipowners smart ships. But it was more difficult to resolve the dilemma of whether the climate will become a friend, or economic growth will be an enemy. The world’s citizens look, with tears in their eyes, at the results of persistent fires, the devastating floods and the unbearable hot summers, all in the time of a pandemic.
Unfortunately, the cost of decarbonization is not clear. The IEA estimated that 4.5% of the global GDP, or nearly $4 tr., are required. Others estimate that 20% of GDP is required, or ?0 b. for Greece alone. Governments will not spend this amount, we believe. If governments will not meet the challenge, we are left with technology. Technological considerations suggest the use of hydrogen, the increase of the storage capacity of batteries, and the CO2 capture at the point of emission.
High fuel oil prices re-emerged since 2000, and in 2021, when oil may reach $100 per barrel. The shipping industry was helped in the past by the manufacturers of marine engines and the major oil companies. The industry was rescued by a new engine and a cheaper fuel (HFO). For 38 years, shipowners were happy with these two tools, until 2005. The IMO terminated their happiness gradually, (by setting emission limits), and by introducing EEDI80 (2011). The major shipowners have adopted a uniform position: “wait and see”. They are waiting for a new fuel. In the meantime, they stated their demands for the new fuel, which is to be a new green fuel, but an acceptable substitute for HFO.
Our proposal to improve climate is simple, borrowing from the slow steaming policy adopted by ships during maritime crises (1981-1987; 2009-2018). This could produce a reduction of the maximum speed limits for all means of transport. Each 4 km/h reduction in ships’ speed means a reduction of consumption of 98 m. tons of oil p.a. Our second proposal is for IMO states, classification societies and shipyards to buy and scrap the legally-obsolete ships.
Appendix 1
The MARPOL 1973/1978/Annex VI81 ruled to reduce ships’ harmful emissions; this was adopted by the IMO in 1997 and came into force in 2005, except in USA where it came into force in 2009. This was amended in October 2008, and the amendments came into force in 2010. The scope was to limit the emissions of Sulphur (SOx) and nitrogen (NOx) oxides, and particulate matter—PM. Emission control areas (ECAs & SECAs for Sulphur) were also introduced (TableA1).
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Table A1. NOx and SOx limits (since 2005).
(*) ECA: sea area regulated by Paragraphs 13 & 14 of the revised VI Annex, where mandatory measures prevent, reduce or control ships’ air pollution from SOx, PM and NOx emissions. Source: MARPOL Annex VI (revised 2008). Scrubbers allow HFO limit 0.5% m/m of Sulphur. SECAS adopted in N America, North Sea and Baltic (2015).
Appendix 2: The World Consumption of Energy in 2011 (FigureA1)
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Figure A1. World consumption 2019 (in exajoules). Source: BP statistic tables.
The main fossil fuels, oil and coal, decreased their shares in world consumption from 64% in 2011 to 60% in 2019, due to a steady coal consumption at 158 exajoules82. Oil increased from 175 to 193, an increase of 10%. Natural gas rose from 116 to nearly 141, an increase of around 23%. Nuclear power fell from 5% to 4%, as a result of accidents in Ukraine and Japan, and the closing of stations in Germany, and elsewhere, due to political cost. Only Turkey built two additional nuclear power stations with support from the Russians. Hydro-electric and renewables increased from 8.5% to 11.4% in 8 years. The long hoped for independence from oil and coal will take a long time. Coal may be dethroned sooner, especially lignite.
Appendix 3: A Catamaran
NOTES
1A penalty fee for oil pollution from ships had to be established since the 1950s, to create a fund for the protection of the sea. The International Chamber of Shipping proposed something similar in October 2021.
2 Goulielmos (2021).
3The grounding of this tanker deposited 100,000 tons of crude oil into the sea, off southwest England.
4She failed to enter the English Channel and grounded on the coast of Brittany, where she broke. This resulted in the 1978 MARPOL Protocol and the involvement of governments in shipping matters for the first time…
5Alaska. It led to Oil Pollution Act 1990 in USA. Shipowners dislike legislation passed by a single nation outside IMO.
6In the Shetland Islands.
7Near Milford Haven, UK.
831,000 tons of oil poured into the Bay of Biscay on the Britany coast, France. She had 10% less steel in her construction.
9Spain. 60,000 tons of oil spilled into the sea.
10In the Titanic disaster (1912), the initial cause was the binoculars missing from the bridge, which prevented the two officers on watch seeing the iceberg. The ship turned left to avoid the iceberg (wrong action); she touched the iceberg pushing it away. This caused the rivets to spring out of the hull, creating a leak in more than 4 departments. Icebergs are almost invisible during the night, and are more frequent further north, where ships sailed to gain time and reach New York faster. The ship ignored telegraphic warnings from other ships about icebergs. The fact that the telegraphy office was private also played a role.
11https://www.imo.org/.
12Ozone protects earth from sun’s harmful rays.
13Volatized materials, during handling, and from turbines.
14https://www.imo.org/en/OurWork/Environment/Pages/GHG-Emissions.aspx, The IMO also introduced the EEXI (Efficiency Existing Ship Index) and CII (Carbon Intensity Indicator) to come into force by 2023.
15https://www.offshore-energy.biz/imo-members-agree-on-50-pct-ghg-emissions-cut.
16https://www.offshore-energy.biz/the-global-biofouling-challenge-calls-for-new-technology.
17Providing nearly ?2 billion, between 2025-2032, for the climate. Near ?5b will come from ETS revenue in 2021, plus an amount from energy taxes.
18http://EUrevisesETStoincludeshippingsector.
19The right to emit carbon dioxide costs ?0/ton now, meaning 6 times higher prices than 2013-2018. The verified CO2 emissions from the four dominant countries, in 2007, were: Germany 487 million tons, UK 257, Italy 226, Poland 210 (1180 m). The ETS system should be terminated, in our opinion.
20The members are shipping companies, energy providers, ports, charterers, banks, shipyards, classification societies, canal authorities, car manufacturers and owners of the infrastructure.
21Scotland is going to host the 26th UN conference on climate change, in Glasgow, between 31/10/2021 and 12/11/2021, under the acronym COP26.
22ICS proposed a compulsory R&D fund of $5 b. to develop technologies of zero emissions, together with a fee on ships for a faster transition to a more expensive fuel, providing zero carbon balance.
23IMO’s opinion is a key.
24The forthcoming conference, “Shaping the Future of Shipping”, takes place in Glasgow parallel to COP26.
25Greeks established a startup, the “Better Origin”, producing food for animals (chickens to start with) from insects (black soldier flies), in an automated laboratory. This project saved emissions of CO2 equivalent to 565 tons/year. The technology mimics nature, in which nothing is wasted, not even residuals of food (931 million tons in 2019, 61% from households).
26It manages 140 plus projects with 500 partners and 13 fuel types in Africa, Asia, Caribbean, Latin America, Middle East and the Pacific islands on line.
27https://www.offshore-energy.biz/bp-nyk-line-to-work-together-on-shipping-decarbinization/.
28https://www.Rotterdam.com/en/news-and-press-releases/uniper-and-port-rotterdam-authority-start-feasibility-study-green-hydrogen.
29https://www.gov.uk/government/publications/clean-maritime-demonstration-competition-cmdc.
30Efuels are: biodiesel, alcohols, lignite-enhanced alcohol and ammonia (known as electro-fuels) plus fuels from waste.
31Consisting of 30% biofuel mixed with 70% VLSFO fuel.
32https://www.portofrotterdam.com/en/port-future/energy-transition/incentive-scheme-climate-friendly-shipping.
33227 m long, 36.6 m wide, 23.6 m deep, equipped with 4 prismatic-type cargo tanks of 91,000 c.m. IEA predicted that ammonia will account for around 45% of global energy demand by 2050.
34All shares acquired by MSEA group, Arkview Capital, and Scorpio tankers (a joint venture).
35https://www.offshore-energy.biz/two-ocean-goig-methanol-fueled-newbuilds-join-waterfront-fleet/.
36The shipyard developed an LNG-powered vessel in 2018.
37This is a project of ? b. to produce hydrogen by electrolysis using solar energy. The hydrogen will be transferred by TAP pipeline.
38Feedstock and marine gasoil (MGO) (https://www.offshore-energy.biz/goodfuels-markets-it-easy-to-go-green/).
39International Renewable Energy Agency (https://www.irena.org/publications/2021/Oct/A-Pathway-to-Decarbonise-the-Shipping-Sector-by-2050).
40There is a difference between zero CO2 emissions and net zero. The latter needs 100% renewable energy derived fuels.
411956 at Dartmouth College.
421989.
43Technical progress is labor-saving.
411956 at Dartmouth College.
421989.
43Technical progress is labor-saving.
44Adopted in 1994; in 1998 became mandatory for tankers & bulk carriers; in 2001 for general cargo ships. Amended/revised 5 times (in 2002, 2006, 2009, 2010 & 2015).
45The tanks for cargo, separated from those for ballast water (1978 MARPOL Protocol (02/10/1983)).
46The MARPOL 1978 protocol, required also a COW in new crude carriers of, or >20,000 dwt and in existing tankers of, or >40,000 dwt, which had to have alternatively SBT. The COW has also an IGS (inert gas system). In COW part of the cargo is circulated via the fixed tank cleaning equipment to remove waxy asphaltic deposits in the tank.
47We have rather to blame naval architects for not taking into account the probability—however small—of sea pollution by those giant tankers (VLCCs & ULCCs).
48Initials for the very large crude carrier-a tanker carrying 2 m barrels of oil!
49Initials for the ultra large crude carrier-tanker carrying more than 2 million barrels of crude oil.
50This act set stringent regulations and liabilities for tankers trading exclusively in USA national waters.
51This is a good paradigm shift.
52Chinese shipyards are now leading in orders.
53The adoption of the 1st SOLAS, (initials of “save our lives at sea”), convention due to 1st World War delayed & adopted in 1925.
54International maritime organization—IMO: a UN agency responsible for maritime safety etc. In operation since 1958 (as IMCO)/and since 1982 (as IMO), with 5 committees, of more than 166 member states and more than 300 staff (London). IMO’s 16 main conventions are considered very important. Important is also chapter IX “on safe management (ISM Code) of ships”, a kind of management “quality standard” like those of the ISO. The code considered necessary after the 1987 marine accident, in Belgium, involving the F/B Herald of Free Enterprise (Goulielmos & Goulielmos, 2005).
55Marine study (internet site).
56To have a scrubber, a double hull, to comply with ISM code.
57Progressive nations devote a large percentage of their GDP to applied research, in special laboratories, universities, and research centers. Progress was made in processing iron, and especially steel. The use of lighter, but equally strong, steel, was a great leap forward for economies of scale. This coupled with a better welding to fasten steel plates together, and robotics were added. Shipbuilding nations should produce a new blend of steel and become global champions in building ships. Steel prices, in September 2021, went up to $1800/ton from $500. Scrap prices went-up to $450/ton. Ship hulls from plastic, aluminum, glass, titanium or other materials used in space technology, are not used yet to build large ships… The new materials, together with AI, must focus on shipbuilding, to build larger, cheaper, stronger, smarter ships.
58Engines use a mixture of 2 different fuels (e.g., natural gas & diesel) now.
59Standards required in ECAs, since 2016. This is an IMO regulation to be in force for all vessels above 24 m, with a combined propulsion power of more than 750 kW, and/or a generator engine above 129 b. kW, which laid keel after 01/01/2021. The regulation sets NOx emission limitations in NECAs—nitrogen emission control areas—in North America, US Caribbean, Baltic & North Sea. IMO Tier IV certification is also required for engine replacement (Source: MarQuip, in internet).
60A ship’s bottom and its condition are also important. A reduction in hull roughness from 300 micrometers to 50, saves 13% of the fuel cost.
61These ideas applied in Catamarans, as shown in Appendix 3.
62The “diesel internal combustion engine” was a great invention in saving energy in 1940s.
63It is remarkable what savings in fuel consumption were achieved by containerships during last economic crisis (2009-2018) by slow steaming. But there were great gains for the environment, too.
64 Stopford (2009; p. 234).
65The world oil consumption in 2011 was 4059 million tons.
66Photovoltaic parks formed in deserts are most productive. Photovoltaic parks are today found at sea and on land, in fields, and in roofs as well.
67Fuel oil with very low Sulphur.
68Marine diesel oil.
69Marine gas oil.
70Storms and hurricanes acted uncontrolled in our planet followed by ice melting, which increased sea surface.
71This is not the first time when oil has been threatened. In 1980-1990, LNG tankers emerged, and some tankers burned LNG. This saw its demand grow from industries, commercial and domestic users, as cleaner and efficient. Its price, however, rose dramatically at the end of 2021.
72Bulk carriers and oil tankers, though much greater in number than containerships, had more favorable treatment.
73An event, or condition, outside the knowledge of the observer.
74 Wang (2014).
75https://www.offshore-energy.biz/lng-is-no-longer-creating-the buzz-ammonia-is/.
76Newsletter@offshore-energy.biz.
77Involving Azane fuel solutions & the Norwegian green platform.
78This was clever as Germany is the leader of EU-27.
79Unattainable with existing measures.
80EEDI measures for new ships the grams of CO2 per transport work (g of CO2 per ton mile).
81The 1st annex concerned the oil spills caused by tankers due to collision or grounding. Regulation 13F (No 19 now) required the new tankers, ordered after 1993 (6th July), to have a double hull. The 13G (No 20), in 2005, regulation, tried to speed-up the phasing-out of the single hull tankers. Regulation 13H (No 21), prohibited single hull tankers, over 5000 dwt etc., to carry heavy grades of oil (2006).
821 joule is the amount of electricity required to run a 1 W device for 1 second. One exajoule equals 1018 joules. The USA consumes 94 exajoules per annum. The world needed 584 exajoules in 2019.